FEDERAL COURT OF AUSTRALIA Garrett v National Australia Bank [2007] FCA 530 ANDREW MORTON GARRETT v NATIONAL AUSTRALIA BANK, MICHAEL CHANEY, JOHN STEWART, MICHAEL ULMAR, GEOFFREY TOMLINSON, AHMED FAHOUR, JOHN THORN, MALCOLM WILLIAMSON, DANNY GILBERT, PAUL RIZZO, KERRY MCDONALD, PATRICIA CROSS, HANY MESSIEH, BRENDAN CASE, GARRY NOLAN, MICHEALA HEALY, JOHN CASSAR, TIMOTHY FRENCH, SIMON ILLSLEY, GRAHAM SOFTLEY, SAM DAVIES, MCGRATH NICHOL (SA), SUNBURST HOLDINGS PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION), SUNBURST PROPERTIES PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION), BRAIDWOOD OPERATIONS PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION), BRAIDWOOD MANAGEMENT PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION), DRUMCALPIN WINES PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION), COLIN NICHOL, TASVINUM (RECEIVERS & MANAGERS APPOINTED) (IN LIQUIDATION), MCGRATH NICHOL (VIC), SCOTT EVANS, DAVID PROUDMAN, JOHNSON WINTER & SLATTERY, BRUCE CARTER, JOHN HART, FERRIER HODGSON (SA), DAVID COLOVIC, KELLY & CO, ALAN SCOTT, SIMS PARTNERS, JOHN ROGER CROSBY, PHILLIP DOUGLAS MARSHALL AND NEIL MACKENZIE SAD 16 OF 2007 MANSFIELD J 13 APRIL 2007 ADELAIDE IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SAD 16 OF 2007 BETWEEN: ANDREW MORTON GARRETT Applicant AND: NATIONAL AUSTRALIA BANK First Respondent MICHAEL CHANEY Second Respondent JOHN STEWART Third Respondent MICHAEL ULMAR Fourth Respondent GEOFFREY TOMLINSON Fifth Respondent AHMED FAHOUR Sixth Respondent JOHN THORN Seventh Respondent MALCOLM WILLIAMSON Eighth Respondent DANNY GILBERT Ninth Respondent PAUL RIZZO Tenth Respondent KERRY MCDONALD Eleventh Respondent PATRICIA CROSS Twelfth Respondent HANY MESSIEH Thirteenth Respondent BRENDAN CASE Fourteenth Respondent GARRY NOLAN Fifteenth Respondent MICHEALA HEALY Sixteenth Respondent JOHN CASSAR Seventeeth Respondent TIMOTHY FRENCH Eighteenth Respondent SIMON ILLSLEY Nineteenth Respondent GRAHAM SOFTLEY Twentieth Respondent SAM DAVIES Twenty-First Respondent MCGRATH NICHOL (SA) Twenty-Second Respondent SUNBURST HOLDINGS PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION) Twenty-Third Respondent SUNBURST PROPERTIES PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION) Twenty-Fourth Respondent BRAIDWOOD OPERATIONS PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION) Twenty-Fifth Respondent BRAIDWOOD MANAGEMENT PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION) Twenty-Sixth Respondent DRUMCALPIN WINES PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION) Twenty-Seventh Respondent COLIN NICHOL Twenty-Eighth Respondent TASVINUM (RECEIVERS & MANAGERS APPOINTED) (IN LIQUIDATION) Twenty-Ninth Respondent MCGRATH NICHOL (VIC) Thirtieth Respondent SCOTT EVANS Thirty-First Respondent DAVID PROUDMAN Thirty-Second Respondent JOHNSON WINTER & SLATTERY Thirty-Third Respondent BRUCE CARTER Thirty-Fourth Respondent JOHN HART Thirty-Fifth Respondent FERRIER HODGSON (SA) Thirty-Sixth Respondent DAVID COLOVIC Thirty-Seventh Respondent KELLY & CO Thirty-Eighth Respondent ALAN SCOTT Thirty-Ninth Respondent SIMS PARTNERS Fortieth Respondent JOHN ROGER CROSBY Forty-First Respondent PHILLIP DOUGLAS MARSHALL Forty-Second Respondent NEIL MACKENZIE Forty-Third Respondent JUDGE: MANSFIELD J DATE OF ORDER: 13 APRIL 2007 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The statement of claim filed on 1 February 2007 be struck out. 2. The application filed on 1 February 2007 be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SAD 16 OF 2007 BETWEEN: ANDREW MORTON GARRETT Applicant AND: NATIONAL AUSTRALIA BANK First Respondent MICHAEL CHANEY Second Respondent JOHN STEWART Third Respondent MICHAEL ULMAR Fourth Respondent GEOFFREY TOMLINSON Fifth Respondent AHMED FAHOUR Sixth Respondent JOHN THORN Seventh Respondent MALCOLM WILLIAMSON Eighth Respondent DANNY GILBERT Ninth Respondent PAUL RIZZO Tenth Respondent KERRY MCDONALD Eleventh Respondent PATRICIA CROSS Twelfth Respondent HANY MESSIEH Thirteenth Respondent BRENDAN CASE Fourteenth Respondent GARRY NOLAN Fifteenth Respondent MICHEALA HEALY Sixteenth Respondent JOHN CASSAR Seventeeth Respondent TIMOTHY FRENCH Eighteenth Respondent SIMON ILLSLEY Nineteenth Respondent GRAHAM SOFTLEY Twentieth Respondent SAM DAVIES Twenty-First Respondent MCGRATH NICHOL (SA) Twenty-Second Respondent SUNBURST HOLDINGS PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION) Twenty-Third Respondent SUNBURST PROPERTIES PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION) Twenty-Fourth Respondent BRAIDWOOD OPERATIONS PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION) Twenty-Fifth Respondent BRAIDWOOD MANAGEMENT PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION) Twenty-Sixth Respondent DRUMCALPIN WINES PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION) Twenty-Seventh Respondent COLIN NICHOL Twenty-Eighth Respondent TASVINUM (RECEIVERS & MANAGERS APPOINTED) (IN LIQUIDATION) Twenty-Ninth Respondent MCGRATH NICHOL (VIC) Thirtieth Respondent SCOTT EVANS Thirty-First Respondent DAVID PROUDMAN Thirty-Second Respondent JOHNSON WINTER & SLATTERY Thirty-Third Respondent BRUCE CARTER Thirty-Fourth Respondent JOHN HART Thirty-Fifth Respondent FERRIER HODGSON (SA) Thirty-Sixth Respondent DAVID COLOVIC Thirty-Seventh Respondent KELLY & CO Thirty-Eighth Respondent ALAN SCOTT Thirty-Ninth Respondent SIMS PARTNERS Fortieth Respondent JOHN ROGER CROSBY Forty-First Respondent PHILLIP DOUGLAS MARSHALL Forty-Second Respondent NEIL MACKENZIE Forty-Third Respondent JUDGE: MANSFIELD J DATE: 13 APRIL 2007 PLACE: ADELAIDE REASONS FOR JUDGMENT The Application 1 On 1 February 2007, the applicant commenced these proceedings against the 43 respondents listed in the application. As it appeared to me that there may be deficiencies in the application and the statement of claim, I directed that the proceedings not be served before the first directions hearing on 21 February 2007. If the proceedings were incompetent, that course of action would avoid unnecessary costs, and if by amendment they could be made clearer, that too would save considerable costs. 2 At a directions hearing on 21 February 2007, I raised many of problems I perceived with the statement of claim with the applicant. He was given leave to file an amended application and/or amended statement of claim by 21 March 2007. The applicant did not take up that opportunity. 3 At the next directions hearing on 11 April 2007, the applicant made submissions about why the statement of claim as originally filed should not be struck out and the application dismissed. 4 The applicant confirmed that he did not wish to amend the application or the statement of claim. Indeed, he did not consider that he could improve the form or content of those documents. By motion of 9 April 2007, he sought an order under O 80 of the Federal Court Rules (the Rules) that the matter be referred to the Registrar to see if pro bono legal assistance could be provided to him to assist him in revising the statement of claim. 5 I do not propose to make any order under O 80 of the Rules because I do not consider that it is in the interests of justice to do so. 6 The first reason is that it is not apparent that those who stand to gain from the successful conduct of the claim, and who have therefore a real interest in its prosecution, are unable to support the applicant in doing so. The statement of claim is referred to in some detail below. It includes claims made by the applicant on behalf of some 25 trusts and (somehow) on behalf of some 15 companies of which the applicant claims to be the sole director, notwithstanding that he is an undischarged bankrupt (a fact he acknowledged during submissions), as well as on behalf of some 10 persons or entities under power of attorney. Whilst it may be that some have no resources to support the funding of the application, many may. The value of the assets of the various trusts, for example, is not disclosed. Nor is the value of the assets of the various beneficiaries of the trusts, nor the value of the assets of those other persons or entities on whose behalf the application purports to have been made. 7 Allied to that reason is that there is no evidence that those for whose benefit the proceedings are brought, at least in part, positively support the proceedings. In such a complex proceeding as the present, where to a significant degree the applicant purports to prosecute it on behalf of and for the benefit of others, I consider it desirable that those persons or entities should indicate that they, on an informed basis, support the institution and maintenance of the proceedings before it would be appropriate for the Court to endeavour to assist its proper conduct by an order under O 80 of the Rules. 8 The third reason is that I do not consider the proceedings are appropriate to be supported by such an order. The concerns I have about the statement of claim, and consequently the application, are explained below. The claims are ill-conceived, ill-pleaded and scattergun. It includes claims which are simply ludicrous, and many which are ostensibly untenable. I do not consider that there is sufficient underlying merit in the statement of claim to conclude that it is in the interests of justice that the applicant be given pro bono legal assistance – if available – to endeavour to restructure it. 9 The applicant has obviously perused many cases in which reference is made to an order or a possible under O 80 of the Rules, as well as the terms of O 80 itself. I do not think any of those cases are of particular assistance to the applicant. They each depend on their individual circumstances. I have of course considered the matters referred to in O 80 r 4(2). For the reasons given, and in all the circumstances, in my view it is not appropriate that a referral be made in relation to the applicant under O 80 r 4(1). 10 I turn to consider the statement of claim. 11 The obvious deficiencies emerge from the first paragraph, apparently identifying the applicant's claimed standing. 12 The applicant is an undischarged bankrupt. He claims to have standing in his capacity as: (a) managing trustee of 25 separate trusts (the Andrew Garrett Group Trusts); (b) sole director, in his capacity as managing trustee of the Andrew Garrett Group Trusts, of 15 private companies (6 of which are in liquidation); (c) founder, sole director and shareholder, in his capacity as managing trustee of the Andrew Garrett Group Trusts, of all corporate entities in the Andrew Garrett Groups of Companies; (d) assignee, in his capacity as trustee of the Andrew Garrett Family Trust No 3, of causes of action by 5 private companies, 2 trusts and 3 individuals; and (e) power of attorney of 7 private companies and 3 individuals. 13 There are obvious issues with the applicant's standing. The applicant does not state how each of the capacities referred to relate to this action. It is unclear exactly what interest any of the trusts, companies or individuals have in this action. It appears that the applicant has listed his numerous capacities in the hope that one will provide a basis for standing. Many of them clearly do not. For example, his purported capacity as trustee of the Unforgettable Houseboats Unit Trust does not apparently give rise to an interest in this action. 14 There are many facts alleged, even in para 1, which simply go nowhere. For example, the applicant asserts a particular relationship with eight financial entities (other than the first respondent) which apparently go nowhere. In other paragraphs there are many other allegations of his and others' relationships with firms of solicitors who are not respondents, and which apparently go nowhere. There are incomprehensible allegations, such as "Andrew Morton Garrett ©® the sovereign sentient being" and that he and others are "possessed of blood ties to citizenship of the United Kingdome [sic] of Great Britain and Northern Ireland." 15 It is quite impossible to comprehend the relevance of all the facts alleged in the introductory paragraphs of the statement of claim, apparently intended to identify the standing of the applicant and the significant persons in the make-up of the causes of action. Causes of Action 16 As against the respondents generally, the application makes allegations regarding: (a) breaches of contract law; (b) unconscionable conduct; (c) breaches of the Trade Practices Act 1974 (Cth); (d) breaches of the Banking Act 1959 (Cth); (e) breaches of the Bills of Exchange Act 1909 (Cth); (f) breaches of the Australian Securities and Investments Commission Act 2001 (Cth); (g) breaches of the Corporations Act 2001 (Cth); (h) breaches of the Crimes Act 1914 (Cth); (i) breaches of the Professional Standards Act 2004 (SA); (j) breaches of the Bankruptcy Act 1966 (Cth); (k) breaches of the Legal Practitioners Act 1981 (SA); (l) breaches of the Public Corporations Act 1993 (SA); (m) breaches of the Criminal Code 1995 (Cth); (n) breaches of the Financial Services Reform Act 2001 (Cth); (o) breaches of the UNCITRAL Convention; (p) breaches of the Constitution; (q) breaches of trust; (r) breaches of the laws of Australia; (s) breaches of corporations law; (t) acting with unclean hands; (u) acting for unjust enrichment; (v) acts of wilful blindness; (w) fraud; (x) breaches of the duty of care; and (x) conspiracy. 17 Other causes of action are relied on in the body of the Statement of Claim filed on 1 February 2007. The Statement of Claim runs for 72 pages. It is not possible to ascertain a reasonable cause of action against any particular respondent anywhere in the applicant's pleading. 18 At one point, under the heading "NAB First Contract of Finance & the Whisson Assets", para 29 of the statement of claim alleges that the "Garrett Group" is a client of the first respondent. Later, allegations are made about financial negotiations with certain entities, during which others made unspecified representations and gave advice which, in an unspecified way, are said to have breached the Trade Practices Act 1974 (Cth) and involved those persons (one of whom is not a named respondent) engaging in unconscionable conduct. Despite that paragraph of the statement of claim containing 37 subparagraphs, the material facts alleged against the first respondent are simply not identifiable. Conclusional allegations are made in the general form set out above without any particularity. How, for example, the first respondent had a "conflict of interest", how it "acted for unjust enrichment to the detriment of the Garrett Interests for his [sic] own benefit" and how the applicant can sue for the "Garrett Interests", how it "intended to conspire to defraud the beneficiaries of the Andrew Garrett Family Trust at Common Law" or breached the Crimes Act 1914 (Cth) or contravened s 52 of the Trade Practices Act 1974 (Cth) is not explained. They are but examples of general unsubstantiated conclusions. They are then used inappositely, for instance in alleging that the first respondent realised an unspecified amount would not be recoverable from 'the Whisson interests". Many more defects could be shown to exist simply in para 29. 19 Succeeding paragraphs of the statement of claim are similarly defective dealing with a series of transactions. It is unnecessary to refer to them all. In the course of those allegations, some but not all of the respondents are referred to. 20 Many of the causes of action relied upon by the applicant are too vague to provide any indication as to whether they are arguable. For example, the applicant states that a number of the respondents have breached 'the laws of Australia' or 'the maxims of law in respect of equity'. Elsewhere the applicant identifies legislative instruments without referring to particular sections which are alleged to have been breached. 21 If the allegations were properly pleaded and particularised, issues may arise as to whether this Court has jurisdiction to hear many of the causes of action relied on by the applicant. For example, the applicant has alleged breaches of the Legal Practitioners Act 1981 (SA). It is not really possible to discern whether such issues do in fact arise. 22 Also, it appears that the applicant is not competent to bring many of the causes of action relied upon in any event. For example, the applicant alleges breaches of the Crimes Act 1914 (Cth) and the Criminal Code 1995 (Cth). Again, a properly pleaded statement of claim would enable such issues to emerge and to be addressed. The statement of claim is so structured that it is virtually impossible to do so coherently, due to the extent of repetition and repetitive cross-referencing. 23 Many of the causes of action relied upon by the applicant are misconceived. For example, the applicant alleges that various individuals in their personal capacity have breached the Trade Practices Act 1986 (Cth). 24 Some of the causes of action referred to in the application are not referred to in the Statement of Claim. For example, no mention is made of the UNCITRAL Convention. Nor are there any allegations as to how this Court has jurisdiction to hear matters arising under that Convention, or how it applies to the facts alleged. 25 The applicant lists one cause of action as a breach of s 22 of the Trade Practices Revision Act 1986 (Cth). Not only does that Act merely amend the primary legislation, the amendment in question is no longer in force and so is of historical interest only. 26 As the above makes apparent, the application and statement of claim are poorly drafted and do not comply with the Rules, particularly: (a) O 4 r 3(1)(b), which requires the applicant to state the Act and provision on which any relief depends. (b) O 11 r 1A(b), which requires a statement by the applicant that he prepared the pleading; (c) O 11 r 2(a), which requires that a pleading contain only a summary form of the material facts; (d) O 11 r 3, which requires brevity; and (e) O 12 r 4, which requires particulars of any damages claimed. 27 The Statement of Claim is otherwise confusing. The applicant often refers to paragraph numbers in the Statement of Claim that do not exist. The applicant makes lists of numerous causes of action and refers back to those lists when he deals with different actions of the various respondents. This practice leads the applicant into obvious error on dozens of occasions. For example, using this process the applicant alleges that the law firm Johnson Winter Slattery "breached the duty of care owed by the bank to its customer". The applicant also alleges that the National Australia Bank was in "breach of his employment agreement". 28 As a result of the practice referred to in [27], the applicant makes at least 2,253 separate allegations resulting from separate acts of the respondents. 29 The applicant makes allegations against some persons and entities which are not named as respondents. For example, KPMG is alleged to have breached various provisions of the Australian Securities and Investments Commission Act 2001 (Cth), the Trade Practices Act 1974 (Cth), other Statutory instruments and other general areas of law, but is not named as a respondent. Similarly, the owner of Trig Point Viticultural Management, Mark Whisson, is alleged to have breached the Trade Practices Act 1974 (Cth) and engaged in unconscionable conduct, but is not named as a respondent. There are other examples readily available. 30 The applicant makes no allegations against many individuals who are listed as respondents. For example, several employees of the first respondent are named as respondents in their personal capacity without any reference being made to them in the Statement of Claim. 31 The applicant seeks the following relief: (a) that an order be made that the respondents pay the costs of this action; (b) that an order be made that the respondents pay damages as set out in this action; (c) that an order be made that the respondents be committed to criminal trial in respect of the Crimes Act 1914 (Cth) and the Criminal Code 1995 (Cth) before a jury of peers in the Supreme Court of South Australia, the Federal Court of Australia or in the alternative they be convicted of the offences set out in the Statement of Claim; (d) that an order be made that the banking license of the NAB is cancelled; and (e) that an order be made that the insolvency practitioner's licences of Ferrier Hodgson, Bruce Carter, John Hart, Sims Partners, Alan Scott, McGrath Nicol (SA)(Vic), Sam Davies and Colin Nicol are cancelled. 32 In relation to (b), the applicant does not give particulars of the damages sought. 33 The applicant is not competent to seek the relief in (c). 34 The power to revoke an authority to carry on a banking business is held by the Australian Prudential Regulation Authority: Banking Act 1959 (Cth) s 11AB. Subparagraph (d) seeks relief which is beyond the power of this Court. 35 The license referred to in (e) does not exist. The power to cancel or suspend the registration of an official liquidator is held by ASIC and the Companies Auditors and Liquidators Disciplinary Board: Corporations Act 2001 (Cth) ss 1290-1298. Subparagraph (e) above seeks relief which is beyond the power of this Court. 36 The above is merely a broad overview of what is an incomprehensible, turgid and poorly drawn statement of claim. 37 Under s 31A (2) of the Federal Court of Australia Act 1976 (Cth), summary judgment may be given against an applicant in relation to the whole of a proceeding if "the Court is satisfied that the [applicant] has no reasonable prospect of successfully prosecuting the proceeding". Section 31A (3) states that a proceeding need not be hopeless or bound to fail for it to have no reasonable prospect of success. 38 Section 31A relaxes the test imposed by General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 as to the circumstances in which a proceeding may be summarily dismissed: see Jewiss v Deputy Commissioner of Taxation [2006] FCA 1688, at [26]; Duncan v Lipscombe Child Care Services Inc [2006] FCA 458, at [6]. 39 The applicant has filed a pleading with a rambling list of broadly framed allegations against 43 different respondents purported to have been involved in a number of different transaction involving the applicant. As already mentioned, this resulted in over 2000 discrete alleged causes of action. The application cannot possibly proceed on the basis pleaded. It is impossible to comprehend or to respond to. It has many substantive deficiencies and pleading inadequacies. Neither the Court nor the respondents should be required to wade through so many permutations of allegations in the pursuit of some allegation of clarity and relevance to each particular respondent, so that the claim against that respondent can be understood. For reasons outlined above, I am satisfied that none of the allegations as presently pleaded have a reasonable prospect of succeeding. 40 The statement of claim is embarrassing and must be struck out under O 11 r 16 of the Rules. The Applicant has been given a chance to amend his pleadings. He has not done so. He says he cannot improve on the document. With that in mind, I will not give further leave to file an amended statement of claim: see Tepperova v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 91 ALD 620, at 625. As the claim cannot be properly pleaded, the application itself should also be dismissed. 41 For the reasons given, no question of costs arises. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. Associate: Dated: 12 April 2007 Counsel for the Applicant: The applicant appeared in person Date of Hearing: 11 April 2007 Date of Judgment: 13 April 2007